Brian Lenihan Jnr (Dublin West, Fianna Fail)

Fianna Fáil does not intend to vote on this motion. We do not agree with the economic analysis of the Sinn Féin approach and we are not convinced that the Government review will establish many changes with regard to the USC. However, we welcome the review, and the motion, as an opportunity to discuss the issue. The review is an opportunity, in the normal course of things, for the Government to consider this matter. Governments consider all tax issues coming up to the budget, so there is nothing unusual about having a review that will end with the budget next year. It is impractical to have a change mid-year.

I do not accept many of the imputations and comments that have been made in the debate, and I especially resent the imputation that there is some connection between the USC and the corruption of office-holders, as was suggested by Deputy Adams, or the more recent comment I heard a few moments ago that I was influenced in the performance of my duties by any person of substance or wealth in the community.

I accept new Deputies have canvassed and heard the views of many voters on the universal social charge. I heard them loud and clear too. It must be remembered, however, that the OECD in a study of the tax systems of 24 member states established Ireland has one of the most progressive. It examined income distribution and poverty across 24 member states according to the share of taxes paid by the super-rich and their share of market income. Figures showed the richest 10% of Ireland's population paid 39.1% of the total income tax bill. Ireland ranks third behind only two other states where the richest 10% pay more than 40% of their states' tax bill. On average across all 24 countries surveyed, the richest 10% of the population pay 31.6% of the tax bill. The study also considered the percentage of overall income earned by those in the wealthiest 10% of the population with an OECD average of 28% emerging. The progressivity of Ireland's tax system is very advanced when compared internationally.

This is, however, at variance with the rhetoric and the ideological guff we have had to listen to from some quarters in this House. The programme for national recovery makes the real position clear. We have eroded the income tax base to an unsustainable level which must be rectified. It can only be rectified by the abolition of tax shelters, as well as the broadening of the tax base. After 2000, the entry point in income tax increased from €7,238 to €18,300. Since the introduction of individualisation, tax bands have widened by 105% for a single person and married two earners. Credits have increased by 92% since their introduction in 2001. These increases in tax exemptions and immunity from taxation were introduced over time. Accordingly, in 2004, 34% of tax units were exempt from paying income tax. Last year, that percentage had increased to 45%. When I hear the constant referral in this House to ordinary people, I recall the 55% of ordinary people who pay tax. Is it Sinn Féin policy that the other 45% should pay no tax at all?

I am sure there will be some guffaws but I do consider myself a social democrat and believe the payment of taxation is fundamental to the ordering of a just society. So too is the progressive payment of taxation which does not entail a large group should pay no tax at all. That is the proposition that Sinn Féin, with its ideologically driven slogans, is trying to push.

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